Buy-to-let investors are now achieving their strongest returns in over a decade, with average rental yields reaching 7.11% in April 2025, according to new data from Paragon Bank.

This marks the highest level recorded since February 2011, when average yields stood marginally higher at 7.12%.

The rise continues a trend of sustained yield growth, following consecutive monthly increases in the first quarter of this year. The latest figure surpasses the 6.94% achieved at the end of 2024, which had already marked a 13-year high.

Paragon’s mortgage offer data, which includes both purchase and remortgage activity, reveals a year-on-year increase of 40 basis points. The uptick reflects a combination of subdued house price growth and ongoing upward pressure on rents, driven by a chronic shortage of privately rented homes and consistently high tenant demand.

RESILIENCE

Since hitting a low point of 4.91% in May 2017, average yields have followed a clear upward trajectory. The bank’s latest analysis underlines the resilience of buy-to-let returns amid wider market uncertainty.

Russell Anderson, commercial director of mortgages at Paragon Bank, said: “Our latest lending data highlights how average rental yields have continued to increase from the 13-year high we revealed at the end of last year. While the most recent economic instability caused by the threat of Trump’s tariffs is understandably impacting business confidence across many sectors, these figures offer tangible evidence that buy-to-let continues to offer strong returns for investors.

“This is particularly true where landlords employ a strategy of targeting properties that offer higher returns, HMOs being the most obvious example, or investing in areas where property is relatively more affordable but benefits from the strong tenant demand we see all over the UK.”

REGIONAL DATA

At a regional level, Wales continues to deliver the strongest returns for landlords, with average yields rising to 8.43% in April, up from 8.09% in December. By contrast, Greater London remains the area with the lowest average yields at 5.78%, although this too has improved by 30 basis points since the final quarter of last year.